If you were banking on getting a big stash of points through credit card sign-up bonuses to make your travel dreams a reality, you may want to have a backup plan.
Issuers have begun tightening the reins on who is eligible for those enticing offers to earn a pile of points for meeting a minimum spending requirement. Some of the newest rules appear to be designed to reduce the number of applicants who apply for a card just to get the introductory offers.
Here are some recent moves issuers have taken:
If you’ve ever owned a particular American Express card and earned a welcome bonus on it, you’re subject to American Express’ “once-in-a-lifetime” rule, which means you likely won’t be eligible for the bonus for that exact card again, even if years have passed between closing that card and applying for it again.
But now, the issuer has added even stricter language to its cardholder agreements, stating that you may not qualify for a welcome offer based on your overall history with American Express, including the number of cards you may have opened and closed in the past.
We changed the language regarding welcome bonuses to be more transparent with consumer card members and to provide them with incentive eligibility information ahead of application completion and subsequent credit check.
American Express won’t divulge the exact patterns that would prevent someone from qualifying for a welcome offer. But it did add a new tool to its website: when you apply online, you’ll get an alert telling you whether or not you’ll qualify for the welcome offer. Then you’ll have the option to stop the application before your credit is pulled.
“We changed the language regarding welcome bonuses to be more transparent with consumer card members and to provide them with incentive eligibility information ahead of application completion and subsequent credit check,” says Charlotte Fuller, a spokesperson for American Express.
The Barclays Arrival® Premier World Elite Mastercard®, which launched in April 2018, is specifically designed to reward long-term loyalty. Instead of front-loading new cardholders with a traditional sign-up bonus, the card offers an annual loyalty bonus that breaks down this way:
- Spend $15,000 on the card, get 15,000 bonus miles (worth $150)
- Spend an additional $10,000 for an additional 10,000 miles (worth $100)
Since the card also earns double miles back on all spending, if you spend at least $25,000 on the card annually you’ll earn 50,000 miles on your spending plus the 25,000 bonus miles for a total of 75,000 miles, worth $750, every year. But if you spend less than $15,000 in a year, you get no loyalty bonus at all.
The card’s terms and conditions also state that you may not qualify for this offer if you’ve had any other Arrival card before. So if you’ve ever had the Barclaycard Arrival™ World MasterCard® or the Barclaycard Arrival® Plus World Elite Mastercard®, you could still be denied the Barclays Arrival® Premier World Elite Mastercard® or any bonuses associated with having the card.
You may already be aware of Chase’s 5/24 rule, but the issuer has recently implemented additional limits on specific products:
- The Chase Sapphire cards limit you to owning just one. The rule, put into effect in August 2017, means if you have the Chase Sapphire Preferred® Card, you can’t get the Chase Sapphire Reserve® and vice versa. You also won’t qualify for a Sapphire card if you’ve earned a sign-up bonus on one of the two cards within the past 24 months, even if you’ve closed that account.
- You can sign up for only one of the two Chase Southwest Rapid Rewards® personal credit cards. Prior to that rule, which was implemented in April 2018, savvy Southwest fans could theoretically earn the sign-up bonus on both the Southwest Rapid Rewards® Premier Credit Card and the Southwest Rapid Rewards® Plus Credit Card and get a huge points boost toward the 110,000 needed to earn a coveted Southwest Companion Pass.
- If you already own the Marriott Rewards® Premier Credit Card, you won’t be approved for the Marriott Rewards® Premier Plus Credit Card, which launched in May 2018 with this offer: Earn 75,000 Points after spending $3,000 on purchases in your first 3 months from account opening with the new Marriott Rewards® Premier Plus Credit Card! You can call cardmember services to check whether you’re eligible to change your current card to the Marriott Rewards® Premier Plus Credit Card, but you won’t get the sign-up offer.
What this could mean for you
If you’re interested in a credit card just for what it offers upfront, you may want to rethink your strategy. Although sign-up bonuses can be lucrative, they’re also meant to entice you to apply for a card you may not have gotten otherwise.
Although sign-up bonuses can be lucrative, they’re also meant to entice you to apply for a card you may not have gotten otherwise.
Chasing rewards is a good idea only if you can pay your bill in full and on time every month. Otherwise, the interest fees on a balance will eat away at the value of any rewards.
Ask yourself how you plan to use the card once you’ve reached that minimum spending requirement. You don’t want to get stuck with a card you never use that you have to pay an annual fee for. You may find it more rewarding overall to stick with a card that you plan to keep for the long haul because it fits your spending habits.